The problem is linux shell does its own interpolation

Yes, Anonymous Monk - you were spot-on in your analysis.

Here is why:

$ a="Hello"

$ echo $a
Hello

$ echo "$a"
Hello

$ echo '"$a"'
"$a"

$ echo "'"$a"'"
'Hello'

$ echo ""'"$a"'""
"$a"
[download]

For the actual solution to my problem, this means:

    my $command = qq/egrep "'"^$lemma:"'" \/home\/lexicon/;

    my $lexical_entry = `$command`;
[download]

Thanks to all those who were willing to help. Your effort to respond is much appreciated.

Thanks for leading me towards the actual solution!

Cheers - Pat